Policymakers can build on Minnesota’s historic progress in increasing access to affordable health care by restoring eligibility for MinnesotaCare for a group of workers who are among the most likely to lack coverage.
Making MinnesotaCare once again available to workers earning between 200 and 275 percent of federal poverty guidelines is a win-win: eligible households would save an average of $1,100 per year compared to a typical private option, and federal funding could cover any costs to the state budget. This change is supported by Governor Mark Dayton, the recent Health Care Finance Task Force, and the Senate’s Health and Human Services proposal.
Our analysis of Census data shows that this proposal is well targeted to reach some of the Minnesotans most likely to lack health insurance today.
- The people who would become eligible for MinnesotaCare are about 3 times more likely to be uninsured than people with higher incomes. Currently, 8.5 percent of people in this income range don’t have health insurance, compared to just 2.9 percent of people earning more.
- Minnesotans of color who would become eligible are more than twice as likely to be uninsured than their white peers. The uninsurance rate for Minnesotans of color in this income range is 16 percent; for white Minnesotans with the same earnings, it is 6.6 percent.
MinnesotaCare is a homegrown solution to a nationwide problem: lots of people work hard but still can’t afford health insurance. MinnesotaCare provides an affordable, high quality health plan for farmers, entrepreneurs and small business employees across the state. However, policy changes in 2014 made MinnesotaCare available to fewer people, and today, a single person becomes ineligible for MinnesotaCare when their earnings reach about $24,000, instead of about $33,000.
The Affordable Care Act (ACA) provides federally-funded tax credits that bring down the cost of health insurance premiums for moderate- and middle-income people who buy their health insurance on the private market. However, for households with lower earnings, the relief offered by the ACA is often too small to make high quality coverage fit in a family’s budget. Making MinnesotaCare available again to these households would be an important step forward.
If eligibility is restored, an estimated 37,000 Minnesotans would enroll in the more-affordable MinnesotaCare and about 4,200 previously uninsured Minnesotans would get covered. These 41,300 Minnesotans would save an average of $1,100 per year relative to a typical plan offered on MNsure.
Estimates vary on what restoring MinnesotaCare eligibility would cost, ranging from saving Minnesota $26 million annually once the restoration rolls out, to a cost of about $34 million per year. The final bill will depend on the specifics of a federal government waiver that is required to move this policy forward.
This is a policy change we can afford, thanks to resources available in the Health Care Access Fund. Providing more Minnesotans with an option for affordable, high quality health insurance is the right thing to do.